This book wasn't all I hoped it would be, though it did open a window on some people like Kelly, and ideas, like the portfolio formula, with which I was not familiar. William Poundstone has been nominated twice for the Pulitzer Prize. He lives in Los Angeles. William Poundstone. In two Bell Labs scientists discovered the scientific formula for getting rich. One was mathematician Claude Shannon, neurotic father of our digital age, whose genius is ranked with Einstein's.
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In two Bell Labs scientists discovered the scientific formula for getting rich. One was mathematician Claude Shannon, neurotic father of our digital age, whose genius is ranked with Einstein's.
The other was John L. Kelly Jr. Together they applied the science of information theory--the basis of computers and the Internet--to the problem of making as much money as possible, as fast as possible.
Thorp took the "Kelly formula" to Las Vegas. It worked. They realized that there was even more money to be made in the stock market. Thorp used the Kelly system with his phenomenally successful hedge fund, Princeton-Newport Partners.
Shannon became a successful investor, too, topping even Warren Buffett's rate of return. Fortune's Formula traces how the Kelly formula sparked controversy even as it made fortunes at racetracks, casinos, and trading desks.
It reveals the dark side of this alluring scheme, which is founded on exploiting an insider's edge. Shannon believed it was possible for a smart investor to beat the market--and William Poundstone's Fortune's Formula will convince you that he was right.
Would you like to tell us about a lower price? If you are a seller for this product, would you like to suggest updates through seller support? Fortune's Formula will appeal to readers of such books as Peter L. All try to explain why smart people take stupid risks.
Poundstone goes them one better by showing how hedge fund Long-Term Capital Management, for one, could have avoided disaster by following the Kelly method. Poundstone comes across as the best college professor you ever hand, someone who can turn almost any technical topic into an entertaining and zesty lecture.
Read more Read less. Frequently bought together. Add all three to Cart. These items are shipped from and sold by different sellers. Show details. Customers who viewed this item also viewed. Page 1 of 1 Start over Page 1 of 1. Previous page. Next page. Review "Seldom have true crime and smart math been blended together so engagingly. William Poundstone is the bestselling author of several nonfiction books, including Labyrinths of Reason and The Recursive Universe.
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Write a customer review. Most helpful customer reviews on Amazon. Verified Purchase. It's hard to describe what this book is. Is it a primer on betting strategies?
A look at practical math? A history of mathematically inclined gamblers? A "mob" story? A manual for cash management in investing? The book has facets of each, though in the end, the main takeaway is the superiority of the Kelly system for managing bankrolls whether gambling or investing.
For the most part, it is an interesting read though there are sections that bog down. I'd recommend the book as an interesting historical look at some people who tried to beat the house - in gambling or investing - and as a primer on the Kelly method but I wouldn't suggest that anyone head to Vegas or Wall St. Excellent book. Solid explanations of both the Kelly formula and its historical context with Ed Thorp, Claude Shannon, etc. Only quibble is there is not quite enough math in it.
One gets the feeling that author Poundstone wanted to leave out the math, so as not to intimidate the non-mathematical reader, but by doing that he doesn't provide enough details on the Kelly formula. Had to go online and read some articles about the formula to understand it. That information should have been in the book. Well worth the money! This a fascinating history book. The author is a great writer. The history of how people try to make money gambling and in the stock market.
And why it is so hard. All sorts of famous people and scientists who worked on ways to beat the systems. Some succeeded. I could not put it down. A great book. Amazing book that breaks down the Kelly Criterion and all of the past mathematical equations and other weirdness that helped him establish it. The book is chocked full of good stories and explanations but it's drawn out with stories that in my opinion are based solely off of people's ego instead of there lack of understanding.
I would still recommend this book but I would google "Kelly Criterion" for some background information about what in Christ's name you're actually reading about.
This book talks about the fundamentals about logic, information and probability. It talks a lot about Claude Shannon's story which is very attractive to me. And then it discusses the generation of information theory and the essence of it.
As a scientific researcher in a very much related field operations research , I find the discussion precise and accurate. It also talks about the story about several other important figures in the development of information theory, such as Kelly, Thorpe etc. In particular, it includes the debate over the celebrated Kelly's formula. This is the best book I have ever read on the topic of Kelly's formula. And it really explains it well.
I will recommend this book to any person who is interested in information theory or computer science or any related field.
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'Fortune's Formula': Wanna Bet?
Don't trust the title of "Fortune's Formula" -- or its subtitle, either. If you expect the book to be about only one formula, untold story or scientific betting system, you'll become hopelessly confused. Those words should all be plurals. Petersburg wager to today's Wall Street computer simulations. Fortunately for the casual reader, Poundstone balances the heavy helpings of statistical scrutiny with the fascination of cultural voyeurism, taking readers inside the unfamiliar worlds of gambling and investing. He leavens "Fortune's Formula" with tales of the quirky, greedy and often criminal characters who dreamed up these formulas -- and exploited them all the way to the bank or to prison.
In two Bell Labs scientists discovered the scientific formula for getting rich. One was mathematician Claude Shannon, neurotic father of our digital age, whose genius is ranked with Einstein's. The other was John L. Kelly Jr. Together they applied the science of information theory--the basis of computers and the Internet--to the problem of making as much money as possible, as fast as possible. Thorp took the "Kelly formula" to Las Vegas.